Balbarino vs. Pacific Ocean Manning, Inc.

A seafarer suffering from an illness not listed in Section 32 of the POEA-SEC is entitled to the disputable presumption of work-relatedness, but must still prove by substantial evidence a reasonable nexus—probability, not certainty—between his working conditions and his illness; once such proof is adduced, the burden shifts to the employer to overcome the presumption, failing which the illness is deemed work-related and compensable. The third-doctor referral procedure under Section 20(B)(3) of the POEA-SEC pertains only to the determination of fitness to work or degree of disability, not to the determination of work-relatedness, and the seafarer cannot be faulted for non-referral where he manifested willingness to submit to a third doctor but the employer failed to act.

Alcid C. Balbarino was a seafarer employed by respondent Worldwide Crew, Inc. through its local manning agent co-respondent Pacific Ocean Manning, Inc. His employment was governed by a POEA-approved Contract of Employment and an overriding Collective Bargaining Agreement between Associated Marine Officers' and Seamen's Union of the Philippines (AMOSUP) and Worldwide. The 2000 POEA-Standard Employment Contract (POEA-SEC), which sets the minimum terms and conditions for Filipino seafarers, provides for compensation and benefits in case of work-related illness or injury, including medical treatment, sickness allowance, and disability benefits. Section 20(B)(4) of the POEA-SEC creates a disputable presumption that illnesses not listed in Section 32 are work-related, while the CBA provides additional benefits subject to its own qualifying conditions.

On August 26, 2008, Alcid C. Balbarino was re-hired by respondent Worldwide Crew, Inc. through its local manning agent, co-respondent Pacific Ocean Manning, as an able seaman on board the M/V Coral Nettuno, a chemical/gas tanker. This was Alcid's fifth contract with respondents. Under his POEA-approved Contract of Employment, the term was to last nine months with a monthly salary of US$563.00, and his employment was governed by an overriding CBA between AMOSUP and Worldwide. On October 1, 2008, Alcid was declared fit to work by the company-designated physician and was deployed on board the vessel.

On January 11, 2009, Alcid noticed a mass on his right thigh and soft swelling on the right side of his forehead. He was referred to the surgical emergency ward of AZ Klina hospital, where physicians suggested removal of the tumor, which was postponed due to the vessel's imminent departure. On February 2, 2009, a team of doctors in Belgium removed the tumor. A CT scan revealed a clear bone defect of the skull, with imaging suggesting a primary tumor or metastasis of a remote tumor. Further examinations showed multiple lung metastases and swelling on his leg, suspected to be the primary tumor. After combined examination of biopsies from the forehead tumor and the leg mass, Alcid was diagnosed with alveolar soft part sarcoma. He underwent further treatments and examinations on various dates in March 2009.

On April 14, 2009, Alcid was repatriated and admitted at St. Luke's Hospital, where he underwent various laboratory examinations including CT scans of his chest and abdomen and a bone scan. The results showed multiple pulmonary nodules and bone metastasis to his skull. On April 27, 2009, Dr. Natalia G. Alegre II, the company-designated physician, issued a Medical Report confirming that Alcid's biopsied mass showed soft tissue alveolar sarcoma—a highly vascular tumor of muscular origin representing less than 1% of soft tissue sarcomas of adults, with frequent metastases to the lungs, bones, and brain. Dr. Alegre stated that the cause of the illness is genetic, involving a chromosomal abnormality, and is therefore not work-related. Respondents provided Alcid medical attention until May 11, 2009, but he never recovered.

On June 4, 2009, Alcid consulted an independent oncologist, Dr. Jhade Lotus Peneyra, who confirmed the diagnosis of alveolar soft part sarcoma with brain, lung, and bone metastases. Dr. Peneyra cited medical studies revealing that exposure to chemicals such as ethylene oxide leads to a possible risk of developing malignant tumors, and that for Alcid there was limited evidence in humans for the carcinogenicity of ethylene oxide. On September 17, 2009, Alcid consulted Internist and Cardiologist Dr. Efren R. Vicaldo, who diagnosed the same condition with distant metastasis, gave a disability rating of Grade I (120%), declared Alcid unfit to resume work as a seaman in any capacity, and regarded his work as aggravated or related to the disease. Alcid sought payment of disability benefits, sickness allowance, and reimbursement of medical expenses, but respondents rejected his claims.

Alcid initiated a grievance before AMOSUP pursuant to the CBA, but the parties failed to reach an amicable settlement. He then filed a Notice to Arbitrate before the NCMB, and on October 26, 2009, the parties executed a Submission Agreement. On October 3, 2010, Alcid succumbed to his illness. The NCMB, in its October 8, 2010 Decision, awarded disability benefits under the CBA, sickness allowance, reimbursement of medical expenses, and attorney's fees, holding that sarcoma is disputably presumed work-related and excusing Alcid from proving direct causation. The CA reversed this decision on September 22, 2011, holding that Alcid's illness was not work-related and that the company-designated physician's findings were entitled to more weight. Alcid's heirs elevated the case to the Supreme Court via Petition for Review on Certiorari under Rule 45.

• Work-Relatedness: Petitioners maintained that Alcid was exposed to carcinogens such as benzene, hydrocarbons, chemicals, crude oil, gasoline, lubricants, and other harmful cleaning solutions during his employment, as well as extreme weather conditions involving intense heat and freezing cold, and that his long period of exposure spanning five terms contributed to the development or aggravation of his illness.
• Credibility of Company-Designated Physician: Petitioners argued that the CA erred in giving more credence to the findings of the company-designated physician, who is not an expert in the field of cancer, whereas Alcid's chosen physician, Dr. Peneyra, is an oncologist who cited studies showing that employees exposed to certain gases and chemicals developed sarcomas.
• Third-Doctor Procedure: Petitioners averred that Alcid should not have been faulted for the failure to obtain the opinion of a third doctor, as he manifested his willingness to submit himself for examination by a third doctor, which the respondents ignored.
• Alternative Claim Under POEA-SEC: Petitioners urged that if the CBA provision on disability does not apply, Alcid is at least entitled to full disability benefits under the POEA-SEC in the amount of US$60,000.00, given that after repatriation he was no longer able to work and eventually died from his illness, and that the inability to perform customary work for more than 120 days constitutes total and permanent disability.
• Attorney's Fees: Petitioners claimed that Alcid is entitled to attorney's fees, as he was compelled to litigate to defend his rights and interests.

• Illness Not Work-Related: Respondents countered that Alcid's illness is not work-related because it is not included in the list of occupational diseases under the POEA-SEC and Alcid failed to prove a causal connection between his work and his illness, arguing that the NCMB erred in excusing Alcid from the obligation of proving causation.
• Genetic Cause: Respondents averred that the company-designated physician confirmed Alcid's disease was caused by a genetic chromosomal abnormality, and that although contradicted by Alcid's doctors, their opinions are unworthy of credence as they did not conduct an extensive examination.
• CBA Disability Not Applicable: Respondents argued that Alcid is not entitled to the maximum disability benefit under the CBA, which only covers permanent disabilities resulting from accidents.
• Partial Payment of Sickness Allowance: Respondents clarified that Alcid had already been paid US$1,388.73 as sickness allowance, so at best they may only be held liable for the balance of US$863.27.
• Limitation of Medical Treatment Obligation: Respondents maintained that their obligation to provide medical care and treatment accrues only insofar as Alcid suffered from a work-related illness, and lasts until the company-designated physician has assessed the level of disability or confirmed the absence of a work-connection, and that under the CBA the obligation lasts for 130 days after initial hospitalization, which they claimed to have complied with from January 11, 2009 until May 11, 2009.
• No Attorney's Fees: Respondents claimed they are not liable for attorney's fees considering that their denial of Alcid's claim was valid and made in good faith.

• Work-Relatedness of Illness: Whether Alcid's alveolar soft part sarcoma is work-related and compensable under the POEA-SEC.
• CBA Disability Benefits: Whether Alcid is entitled to disability benefits under Article 26.1 of the CBA.
• POEA-SEC Disability Benefits: Whether Alcid is entitled to full disability benefits under Section 20(B)(6) of the POEA-SEC.
• Sickness Allowance: Whether Alcid is entitled to sickness allowance and in what amount.
• Reimbursement of Medical Expenses: Whether Alcid is entitled to reimbursement of medical expenses and up to what period.
• Third-Doctor Procedure: Whether Alcid's failure to obtain a third doctor's opinion is fatal to his claim.
• Attorney's Fees: Whether Alcid is entitled to attorney's fees.

• Work-Relatedness of Illness: Yes. Alcid sufficiently established a reasonable nexus between his working conditions as an able seaman on a chemical tanker and his development of alveolar soft part sarcoma, and respondents failed to overcome the disputable presumption of work-relatedness under Section 20(B)(4) of the POEA-SEC.
• CBA Disability Benefits: No. Article 26.1 of the CBA requires that the permanent disability result from an accident, and Alcid's disability was caused by illness, not accident.
• POEA-SEC Disability Benefits: Yes. Alcid is entitled to full disability benefits of US$60,000.00 under Section 20(B)(6) of the POEA-SEC, his illness being work-related and resulting in total and permanent disability.
• Sickness Allowance: Yes, in the reduced amount of US$863.27. Alcid is entitled to sickness allowance of US$2,252.00 under Section 20(B)(3), but respondents had already paid US$1,388.73, leaving a balance of US$863.27.
• Reimbursement of Medical Expenses: Yes, subject to recomputation. Alcid is entitled to reimbursement of medical expenses incurred within 130 days after initial hospitalization on April 14, 2009, or only until August 22, 2009, amounting to approximately PhP 48,255.57, not the PhP 255,733.87 awarded by the NCMB.
• Third-Doctor Procedure: No, the non-referral is not fatal. The third-doctor provision under Section 20(B)(3) pertains only to the declaration of fitness to work or degree of disability, not to the determination of work-relatedness, and Alcid manifested willingness to submit to a third doctor but respondents failed to act.
• Attorney's Fees: Yes. An award of attorney's fees equivalent to 10% of the total monetary award is warranted because Alcid was compelled to litigate to satisfy his claim for disability benefits.

• Work-Relatedness of Illness: Under Section 20(B)(4) of the POEA-SEC, illnesses not listed in Section 32 are disputably presumed to be work-related. However, despite this presumption, the seafarer must still prove by substantial evidence a causal link between his working conditions and his illness—reasonable proof of work-connection suffices, direct causal relation not being required; probability, not ultimate certainty, is the test. In the performance of his duties as an able seaman aboard the M/V Coral Nettuno, a chemical/gas tanker, Alcid was exposed to various harmful chemicals including fumes, gasoline, ethylene, propylene, butane, methane, naphthalene, and dust. He performed strenuous tasks, rendered overtime, and contended with adverse sea conditions and extreme temperatures over five employment contracts. Dr. Peneyra identified medical studies showing that men exposed to chemicals such as ethylene and ethylene oxide developed sarcoma. Respondents failed to submit counter-evidence to refute these findings, relying solely on Dr. Alegre's sweeping conclusion that the disease was genetic, which was unsupported by substantial basis and failed to consider the varied factors to which Alcid was exposed. The disputable presumption was therefore not overcome, and Alcid's illness was deemed work-related.

• CBA Disability Benefits: Article 26.1 of the CBA provides that the seafarer is entitled to compensation for permanent disability "as a result of an accident." The NCMB misinterpreted this provision by holding that the qualifying phrase "as a result of an accident" applies only to the preceding phrase "or while traveling to or from the ship." The Court agreed with the CA's interpretation that the provision pertains to two scenarios—disability while in service on board the ship, or disability while traveling to or from the ship—both qualified by "as a result of an accident." The comma between the scenarios implies disassociation or independence, and the qualifier applies to both. Since Alcid's permanent disability was caused by illness, not accident, he is not entitled to compensation under the CBA.

• POEA-SEC Disability Benefits: Having established that Alcid's illness is work-related, and given that his condition constituted total and permanent disability—he was unable to work for more than 120 days and eventually died from the illness—he is entitled to full disability benefits under Section 20(B)(6) of the POEA-SEC in the amount of US$60,000.00. The inability of the seafarer to perform his customary work for more than 120 days constitutes total and permanent disability.

• Sickness Allowance: Under Section 20(B)(3) of the POEA-SEC, the seafarer is entitled to sickness allowance equivalent to his basic wage until declared fit to work or the degree of permanent disability is assessed, not exceeding 120 days. Alcid's sickness allowance amounts to US$2,252.00 (US$563.00 multiplied by four months). However, respondents had already paid US$1,388.73, which petitioners did not refute. Accordingly, the paid amount shall be deducted, and respondents shall only be liable for the balance of US$863.27.

• Reimbursement of Medical Expenses: Under Section 20(B)(2) of the POEA-SEC, the employer shall cover the seafarer's medical expenses until the latter is declared fit to work or the degree of permanent disability is determined by the company-designated physician. Under the CBA (Sections 23.4 and 23.4.1), the employer's obligation for medical care lasts for 130 days after initial hospitalization, reckoned from repatriation. The reckoning point is April 14, 2009, when Alcid was admitted at St. Luke's Hospital after repatriation, not January 11, 2009, when he received treatment at a foreign port. The CBA effectively extended the employer's obligation to 130 days after April 14, 2009, or until August 22, 2009. Respondents shouldered medical costs only until May 11, 2009, which is less than the mandated 130 days. However, Alcid may only claim reimbursement for expenses incurred until August 22, 2009, which based on the list submitted amounted to approximately PhP 48,255.57. The NCMB's award of PhP 255,733.87 was thus excessive and baseless, and the case was remanded for recomputation subject to presentation of official receipts.

• Third-Doctor Procedure: The Court clarified, citing Leonis Navigation Co., Inc. vs. Obrero, that Section 20(B)(3) of the POEA-SEC, which provides for referral to a third physician, refers only to the declaration of fitness to work or the degree of disability—it does not cover the determination of whether the disability is work-related. There is nothing in the POEA-SEC mandating that the company-designated physician's opinion on work-relation should prevail or that such determination be submitted to a third physician. Moreover, even if the third-doctor procedure were applicable, Alcid cannot be faulted for non-referral because he expressed willingness to submit to a third doctor, but respondents failed to act on his request. When the seafarer signifies intent to dispute the company doctor's findings, the burden to refer the case to a third doctor shifts to the employer.

• Attorney's Fees: An award of attorney's fees equivalent to 10% of the total monetary award is warranted because Alcid was compelled to litigate to satisfy his claim for disability benefits, pursuant to Article 2208(2) of the Civil Code.

• Disputable Presumption of Work-Relatedness — Under Section 20(B)(4) of the POEA-SEC, illnesses not listed in Section 32 are disputably presumed to be work-related. For the presumption to apply, it must be shown that: (i) the illness is work-related; and (ii) the work-related illness existed during the term of the seafarer's employment contract. Despite the presumption, the seafarer must still prove by substantial evidence a causal link between his working conditions and his illness. Reasonable proof of work-connection is sufficient—direct causal relation is not required. Probability, not the ultimate degree of certainty, is the test of proof in compensation proceedings. It is not required that employment be the sole factor in the growth, development, or acceleration of the illness; it is enough that the employment contributed, even in a small measure, to the development of the disease. The employer must overcome the disputable presumption; failing to do so, the illness is deemed work-related.

• Third-Doctor Referral Procedure — Under Section 20(B)(3) of the POEA-SEC, if a doctor appointed by the seafarer disagrees with the assessment of the company-designated physician, a third doctor may be agreed jointly between the employer and the seafarer, and the third doctor's decision shall be final and binding. However, this provision refers only to the declaration of fitness to work or the degree of disability; it does not cover the determination of whether the disability is work-related. When the seafarer challenges the company doctor's assessment through his own doctor's assessment, the seafarer shall signify his intent, and the burden of activating the third-doctor provision shifts to the employer. The seafarer cannot be faulted for non-referral where the employer fails to act on the seafarer's expressed willingness.

• Cumulative Liabilities Under the POEA-SEC — The employer's liabilities under Section 20-B of the POEA-SEC—medical treatment (Section 20(B)(2)), sickness allowance (Section 20(B)(3)), and disability benefits (Section 20(B)(6))—are separate and distinct liabilities that the employer must satisfy cumulatively. The POEA-SEC does not state that these benefits are alternative or that the grant of one bars the grant of the others.

• Total and Permanent Disability — The inability of the seafarer to perform his customary work for more than 120 days constitutes total and permanent disability. A finding of permanent disability means a permanent reduction of the earning power of a seafarer to perform future sea or on-board duties.

• CBA Interpretation — "As a Result of an Accident" — Under Article 26.1 of the CBA, the qualifying phrase "as a result of an accident" applies to both scenarios described therein (disability while in service on board the ship, and disability while traveling to or from the ship), not solely to the immediately preceding phrase. The comma between the scenarios implies disassociation or independence, and the evident intention of the parties is to provide compensation only in case of an accident during the seafarer's employment.

• "For illnesses not mentioned under Section 32, the POEA-SEC creates a disputable presumption in favor of the seafarer that these illnesses are work related. However, notwithstanding the presumption, We have held that on due process grounds, the claimant-seafarer must still prove by substantial evidence that his work conditions caused or, at least, increased the risk of contracting the disease. This is because awards of compensation cannot rest entirely on bare assertions and presumptions. In order to establish compensability of a non-occupational disease, reasonable proof of work-connection is sufficient - direct causal relation is not required. Thus, probability, not the ultimate degree of certainty, is the test of proof in compensation proceedings." — This passage articulates the canonical formulation of the standard of proof required for seafarers claiming compensation for non-occupational diseases under the POEA-SEC, establishing that probability suffices and direct causation is not required.

• "It is not required that the employment be the sole factor in the growth, development or acceleration of the illness to entitle the claimant to the benefits incident thereto. It is enough that the employment had contributed, even in a small measure, to the development of the disease." — This passage defines the threshold for establishing the work-connection of a seafarer's illness, frequently cited in subsequent seafarer disability jurisprudence to emphasize the liberal standard applied in favor of seafarers.

• "We clarify, however, that Section 20(B)(3) refers only to the declaration of fitness to work or the degree of disability. It does not cover the determination of whether the disability is work-related. There is nothing in the POEA-SEC which mandates that the opinion of the company-designated physician regarding work-relation should prevail or that the determination of such relation be submitted to a third physician." — This passage, quoted from Leonis Navigation Co., Inc. vs. Obrero, delineates the scope of the third-doctor referral provision, clarifying that it applies only to disability grading and fitness-to-work determinations, not to the question of work-relatedness.

• "The separate treatment of, and the distinct considerations in, these three kinds of liabilities under the POEA-SEC can only mean that the POEA-SEC intended to make the employer liable for each of these three kinds of liabilities. In other words, employers must: (1) pay the seafarer sickness allowance equivalent to his basic wage in addition to the medical treatment that they must provide the seafarer with at their cost; and (2) compensate the seafarer for his permanent total or partial disability as finally determined by the company-designated physician." — This passage, quoted from Javier vs. Philippine Transmarine Carriers, Inc., establishes that the employer's obligations for medical treatment, sickness allowance, and disability benefits are cumulative and not alternative.

• Skipper United Pacific, Inc. vs. Lagne, G.R. No. 217036, August 20, 2018 — Controlling precedent followed. Clarified that despite the disputable presumption of work-relatedness under the POEA-SEC, the seafarer must still prove a causal link between working conditions and illness, with reasonable proof or probability sufficing as the standard.

• Heirs of the Late Manalo N. Licuanan vs. Singa Ship Management, Inc., G.R. No. 238261-G.R. No. 238567, June 26, 2019 — Followed. Elaborated that employment need not be the sole factor in the illness; it is enough that employment contributed even in a small measure to the development of the disease.

• David vs. OSG Shipmanagement Manila, Inc., 695 Phil. 906 (2012) — Followed as factually analogous. Awarded disability benefits to a seafarer who proved that his duties as a third officer on a crude tanker, involving exposure to crude oil and its chemical components, aggravated his sarcoma. The Court relied on this case to support its finding that Alcid's exposure to chemicals aboard a chemical tanker contributed to his sarcoma.

• Leonis Navigation Co., Inc. vs. Obrero, 794 Phil. 481 (2016) — Followed. Clarified that the third-doctor referral provision under Section 20(B)(3) of the POEA-SEC refers only to the declaration of fitness to work or degree of disability, not to the determination of work-relatedness.

• Javier vs. Philippine Transmarine Carriers, Inc., 738 Phil. 374 (2014) — Followed. Explained the rationale behind each employer liability under the POEA-SEC and stressed that medical treatment, sickness allowance, and disability benefits constitute separate and distinct, cumulative liabilities.

• Licayan vs. Seacrest Maritime Management, Inc., 773 Phil. 648 (2015) — Followed. Held that where the employer fails to dispute the presumption of work-relatedness and simply relies on the company-designated physician's unsupported disavowal of work-connection, the medical report is too sweeping and inadequate to support a conclusion. Applied to find Dr. Alegre's report similarly deficient.

• Bahia Shipping Services, Inc. vs. Constantino, 738 Phil. 564 (2014) — Followed. Held that when the seafarer signifies intent to dispute the company doctor's findings, the burden to refer the case to a third doctor shifts to the employer, and the seafarer cannot be faulted for non-referral.

• De Leon vs. Maunlad Trans, Inc., 805 Phil. 531 (2017) — Followed. Recognized that stress, fatigue, and harsh conditions at sea are contributing factors that can aggravate a seafarer's ailment.

• Canuel vs. Magsaysay Maritime Corporation, 745 Phil. 252 (2014) — Followed. Acknowledged that a seafarer's exposure to harsh sea weather, chemical irritants, and dust on board contributed to his cancer.

• Nacar vs. Gallery Frames, 716 Phil. 267 (2013) — Followed for the award of legal interest of 6% per annum from finality of the decision until full satisfaction.

• Section 20-B, 2000 POEA-SEC — Governs compensation and benefits for work-related injury or illness of seafarers. The Court applied its various subsections to determine the employer's liabilities: Section 20(B)(2) for medical treatment after repatriation, Section 20(B)(3) for sickness allowance not exceeding 120 days and the third-doctor referral procedure, Section 20(B)(4) for the disputable presumption of work-relatedness of unlisted illnesses, and Section 20(B)(6) for permanent total or partial disability benefits.

• Article 26.1, CBA between AMOSUP and Worldwide — Provides disability compensation for permanent disability suffered "as a result of an accident." The Court interpreted the qualifying phrase as applying to both scenarios described (disability while in service on board, and disability while traveling to or from the ship), and held that since Alcid's disability was caused by illness, not accident, he was not entitled to benefits under this provision.

• Articles 23.4 and 23.4.1, CBA — Provide that the employer shall shoulder medical attention at the owner's expense for up to 130 days after initial hospitalization, subject to submission of satisfactory medical certificates. The Court applied this to limit the reimbursable medical expenses to those incurred within 130 days from April 14, 2009 (date of repatriation and hospitalization), or until August 22, 2009.

• Article 2208(2), Civil Code — Authorizes the award of attorney's fees when the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. The Court applied this to justify the 10% attorney's fees award, as Alcid was compelled to litigate to satisfy his claim for disability benefits.

Leonen (Chairperson), Gesmundo, and Carandang, JJ., concurred. Zalameda, J., was on official leave.